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The Convergence of Virtual Reality and Social Media: What Legal Issues May Arise?

February 1, 2018

The Convergence of Virtual Reality and Social Media:
What Legal Issues May Arise?
By Brian Sommer

“Virtual reality and augmented reality are going to be the most social platform that has ever existed.”1 — Mark Zuckerberg

In March 2014, Facebook announced the acquisition of Oculus VR for $2 billion.2 The move signaled the social media giant’s bullish entry into virtual reality (VR), and helped set the stage for the immersive technology gold rush era. Zuckerberg believes VR is the future of social media, describing it as the next major computing platform since the advent of mobile.3 For 2017, worldwide revenue from VR headset sales is forecast to reach nearly $4 billion dollars.4 Statistics of this magnitude mean only one thing: Large scale change in social media is on its way.

History proves advances in communication technologies lead to novel legal issues. Nearly 20 years ago, the Digital Millennium Copyright Act modernized outdated copyright laws to curtail pirated music shared on the Internet, one of the first bodies of law in the digital age to have a mass impact on computer users’ daily lives. In today’s world, the tension between property laws and augmented reality (AR) gaming is tested by hundreds of millions people worldwide playing Pokémon Go, and Niantic Labs is facing lawsuits for Pokémon Go players’ indiscretions.5

Investors, technology journalists and the oracles of Silicon Valley agree that VR will affect social media, but what legal issues will arise?6 For months, the narrative has been focused on the inevitable change that immersive technology will bring. But what does that inevitable change look like in the legal context of VR? By examining VR technology, we can hypothesize the ways in which laws will evolve to protect consumers. This article touches on three areas of law that will likely be impacted by the intersection of VR and social media:

Prediction One: More laws will emerge affecting the collection and usage of biometric data.

vTime and AltspaceVR are early entries into the social side of VR, allowing people to socialize with friends or strangers as avatars in virtual worlds. But avatars in VR worlds are expressionless faces, and so much is communicated through visual cues. Companies are just starting to offer VR headsets with biometric data sensors to capture facial,7 eye8 and hand9 movements, which in turn can be used to animate avatars or to mine consumer responses to advertisements.

Only Illinois and Texas have laws regulating how companies can use and store biometric data.10 In May 2016, a lawsuit was filed against Snapchat under the Illinois Biometric Information Privacy Act, claiming it failed to obtain written consent before collecting face geometry and iris scans needed for the Snapchat filter function.11 The FTC has weighed in on best practices for social media platforms using facial recognition technology.12 VR companies should expect more biometric data privacy laws as advances in this technology improve. In turn, it is critical that social media platforms write user agreements reflecting how user biometric data is used and stored.

Prediction Two: Government regulations will obligate social media platforms to monitor cyberbullying.

The allure of VR is the immersive experience, enabling people to interact with one another. But VR’s connectivity is also its vulnerability, which can lead to more instances of harassment. A female reporter in May 2016 wrote about being sexually harassed within the first two minutes of using AltspaceVR for the first time.13 To combat abuse, AltspaceVR, introduced a “space bubble” tool that creates a barrier around an avatar to prevent others from entering personal space.14 Google has been studying ways to minimize VR harassment, such as by degrading the screen color from color to black and white when an avatar intrudes into another’s personal space.15

If technology cannot eliminate online harassment, then victims may turn to legal remedies. Eighteen states have statutes criminalizing cyberbullying.16 The shortcoming with a criminal law is it is the government’s choice, not the victim’s choice, to prosecute. Civil options like suing for harassment, defamation or intentional infliction of emotional distress are expensive to pursue and take time for resolution. In May 2016, the European Commission together with Facebook, Twitter, YouTube and Microsoft announced a voluntary code of conduct that includes a series of commitments to combat the spread of illegal hate speech largely directed at refugees from war-torn nations seeking asylum in Europe.17 If these voluntary pacts prove successful, then more countries may follow suit and compel social media platforms to enact cyberbullying response protocols for virtual environments, those of which are aligned with local cultural standards.

Influencer marketing has become mainstream with 65 percent of brands using social media influencers for promotional purposes.18 The FTC is responsible for making and enforcing the rules that govern social media advertising. In 2015, the FTC published guidelines with hypotheticals illustrating how influencers can “clearly and conspicuously” disclose compensated endorsements on various social media platforms.

Social media experiences in VR will offer innovative and sophisticated new ways to interact with social media influencers, making disclosure rules more complex. Imagine sitting shotgun in VR with world famous rally car driver Ken Block, whose Gymkhana YouTube video series has garnered over 250 million views.19 While driving, Ken endorses Monster Energy drink, saying it’s what gives him focus and energy while driving. Per FTC guidelines, Block’s endorsement would require a “clear and conspicuous” disclosure that Monster paid him for the plug, but how are disclosures communicated in a fast-paced VR immersive environment? We can expect that the FTC is monitoring the intersection of VR and social media closely, and will introduce new guidelines covering how social media influencers should disclose endorsements in VR environments.

With VR headset technology progressing and the price lowering, 2017 could be a breakout year for the interplay of VR and social media. While VR headset spend in 2016 is estimated at $37 million, the figure is expected to reach $2.8 billion by 2020.20 And while we can’t know all the ways this will manifest, biometric data privacy, cyber bulling, and new FTC ad advertising rules are three areas that social influencers, developers, content creators and social platforms can now consider, as Zuckerberg and others continue to make his prediction a reality.

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Brian Sommer is an interactive media and entertainment attorney at IME Law where he focuses his practice on the intersection of traditional entertainment and immersive media. You can follow Brian on Twitter @arvrlaw.